Velox Clearing (Velox), a California-based clearing firm, prime broker, and RIA custodian, has onboarded Michael Higgins to head its prime brokerage business, which serves a client segment that includes small to midsize brokers and hedge funds. Higgins has joined the company as its chief executive officer (CEO) barely a few weeks after its official launch in late 2019.
Prior to Velox, a seven-year tenure at LPL Financial, a major player in the US retail financial advice market and one the nation’s largest independent broker-dealers, took Higgins’ career between 2013 and 2020.
During this long stint, he worked his way up through several senior roles with the firm, culminating with the position of Head of Operations. He also was responsible for the firm’s risk management division. This was preceded by a similar period at AXA Advisor’s broker/dealer and 401(k) retirement units.
Other stops include a four-year term as executive vice president of the international self-clearing trading and technology development firm HB CAPITAL, LLC. During this period, he was a senior executive for three broker-dealers (FINRA, CBSX, NYSE) executing in excess of 1.2 billion shares monthly for proprietary and HFT trading accounts.
Higgins’ lengthy career dates back to 1990 when he joined Charles Schwab responsible for retail activities at seven branch offices located in New York. He also led the efforts to establish the broker’s presence in the UK and then managed all London operational staff from NYC headquarters.
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New entrants to the prime brokerage market
Velox has attracted several brokerage staffers from different locations over the past few months as the company ventures into the space by offering a product that combines custody and clearing offerings. The SEC-registered company targets investment advisers, automated traders, small to midsize brokers, and hedge funds that have largely been neglected by incumbent firms.
The service caters to clients who do not have a prime broker, or that need additional credit lines to access either liquidity or execution services. The exit of legacy players in the prime brokerage space will allow new offerings, such as Velox product, to rapidly gain customers and fill the void.
The increase in banking regulation, which mandates increased minimum levels of capital and increases in reporting expenses, has resulted in a lot of banks leaving the prime broking space.
Commenting on his appointment, Higgins said: “The clearing sector is ripe for innovation, and I’m thrilled to be joining an outstanding team that is at the forefront of this movement. My industry experience to date has instilled a deep understanding of the challenges and opportunities our clients face, and I look forward to helping Velox and its’ clients successfully navigate a rapidly evolving landscape to achieve growth.”